MNI DATA IMPACT: UK Public Borrowing Falls To 17 Year Low>

--Fall In Debt Interest Payments Boosts Finances In Latest FY 

By Les Commons and Laurie Laird

LONDON (MNI) - The following are the key points from UK public sector 

finance data published Wednesday by the Office for National Statistics. 

The data were released ahead Chancellor Philip Hammond's appearance 

before the Treasury Select Committee to discuss the Spring fiscal 

update.

     - Borrowing did exceed the OBR target of Stg22.8 billion, despite 

the salutary effect of the strong jobs market.  Full-year borrowing was 

flattered by a Stg7 billion plunge in debt interest payments linked to a 

falling RPI. 

     - The Chancellor is likely to face increasing clamour to loosen the 

purse strings, after borrowing fell by 41.0% in the 2018/19 fiscal year 

to Stg24.7 billion, the lowest level since 2001/02.

     - However, the age of austerity may have already come to an 

unheralded end, with net social spending rising by 3.0% over the fiscal 

year, the biggest increase since 2012/13.

     - A 5.6% jump in VAT receipts (the biggest increase since 2011/12) 

and a 7.0% surge in income and capital gains tax reflect the resilience 

of the labour market. Slower corporation tax growth, however, underlines 

the challenges that remain as Brexit uncertainties play out.

     - Debt-to-GDP, whether using the ex-Bank of England or total net 

debt measures, both ended FY2018/19 lower, but not perhaps to the extent 

the sharp fall in borrowing would suggest. Debt-to-GDP ex-BOE fell to 

74.6% from 75.6% in '17/18  -- which in turn was down from 79.2% in 

'16/17. It ended the year well above the 70.7% financial crisis low 

water mark seen in 2010/11.